VZCZCXRO5572
RR RUEHDE RUEHDH RUEHDIR
DE RUEHKU #1037/01 3021447
ZNR UUUUU ZZH
R 291447Z OCT 09
FM AMEMBASSY KUWAIT
TO RUEHC/SECSTATE WASHDC 4132
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHDC

UNCLAS SECTION 01 OF 02 KUWAIT 001037 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ARP, EEB/ESC/IEC/EPC, 
ENERGY FOR GEORGE PERSON 
 
E.O. 12958: N/A 
TAGS: ENRG EPET SENV KU
SUBJECT: ODD BEDFELLOWS: OIL RICH KUWAIT SEEKS ENERGY 
EFFICIENCY 
 
REF: KUWAIT 823 
 
¶1. (SBU) SUMMARY:  GCC nations have the highest per capita 
energy consumption rates in the world, leaving some Kuwaitis 
in search of more efficient energy sources or renewable ones 
to decrease its reliance on domestic crude oil.  Although 
Kuwait has the fifth largest proven oil reserves in the 
world, it is using an ever-increasing amount of its oil and 
gas production domestically (reftel).  According to the 
Ministry of Electricity and Water (MEW), Kuwait's maximum 
available generating capacity is 10.9 gigawatts per day.  At 
peak demand Kuwait's Institute for Scientific Research 
(KISR), estimates that Kuwait uses roughly 10 gigawatts per 
day and projects a consumption increase of 6-7% per year. 
Rampant consumption is exacerbated by the fact that while, on 
average, the GoK pays 16 fils per kilowatt hour (6 cents per 
kilowatt hour) for electricity, citizens pay 2 fils per 
kilowatt hour (two-thirds of a cent per kilowatt hour).  On 
Oct. 13, Econoff, with DOE official and consultants, met with 
officials from the Ministry of Electricity and Water (MEW), 
the Ministry of Public Works (MPW) and KISR scientists to 
discuss Kuwait's rampant electricity demand, long-term 
prospects for standardizing GCC codes that are compliant with 
U.S. business standards for green buildings and windows, and 
options for extending the life of oil through partnership 
with DOE's Middle Eastern Regional Energy Efficiency (MEREE) 
Initiative.  END SUMMARY. 
 
MEW to DOE: HELP US DECREASE EXPENSES, PEAK LOAD DEMAND 
 
¶2. (SBU) MEW officials, including Abdullah A. Sanqour, 
Assistant Undersecretary for the Power Transfer Network, 
listened intently to the DOE presentation on Oct. 13, about 
partnership and standardized codes, but asked only one 
question: "How can Kuwait immediately improve its electrical 
efficiency, particularly during peak load hours, to decrease 
the threat of blackouts and the cost of electricity to the 
government?"  The GoK's heavily subsidized electricity 
industry leaves it with limited options.  On average, the GoK 
pays 16 fils per kilowatt hour (6 cents per kilowatt hour) 
for electricity, while Kuwaitis pay 2 fils per kilowatt hour 
(two-thirds of a cent per kilowatt hour).  GoK officials have 
noted that raising electricity rates is not an option 
politically.  DOE consultants suggested improving building 
standards to increase energy efficiency and possibly to 
redirect the savings generated to other social welfare 
programs, which could address some of the public criticisms. 
DOE also suggested train the trainer workshops through the 
MEREE Initiative to help MEW energy auditors with addressing 
peak load issues. 
 
QUENCHING THE HOSPITAL DROUGHT, NEW ELECTRICITY DEMANDS 
 
¶3. (SBU) Despite the skewed supply-demand curve for 
electricity, Husam Bader Al-Tahous, Assistant Undersecretary 
for Construction Projects for the Ministry of Public Works 
(MPW), said that his ministry has extensive construction 
plans including eight new hospitals to be constructed, to 
quench Kuwait's hospital drought. Al Tahous said that no 
public hospital has been built in the last 20 years.  The 
largest of these new hospitals, Jaber Al-Ahmed Hospital, is 
currently under tender; with its 1100 beds, it will be the 
largest hospital in the Gulf.  Al-Tahous admitted that the 
construction of Jaber Al-Ahmed Hospital had been delayed, 
asserting that rampant increases in building material costs 
had been worked into the price of the construction tenders, 
driving up the cost substantially.  With the collapse in 
primary material costs, MPW realized that they could develop 
substantial savings by retendering. 
 
¶4. (SBU) Al-Tahous asserted that Jaber Al-Ahmed Hospital, 
with a budget of KD 325 million (USD 1.1 billion) would need 
a new power plant substation built to protect it from 
blackouts similar to those in 2006 - 2007 (reftel). 
Al-Tahous also noted that MPW has 109 projects in its 
portfolio, 35 of which are currently under construction and 
20 of which are in the tendering process.   Al-Tahous said 
that he is keen on his consultants designing for maximum 
efficiency and he has asked them to consider how they can 
harvest the wind and sun for energy.  DOE consultants 
suggested a pilot project engaging local building design 
consultants in best practices.  This pilot initiative would 
serve as a teaching tool for domestic university students and 
as a capacity building tool in cooperation with the MEREE Hub 
project in Jordan. 
 
GOK'S INCREASING RELIANCE ON ITS OWN PRODUCT 
 
KUWAIT 00001037  002 OF 002 
 
 
 
¶5. (SBU) In conversations with Econoff and DOE 
representatives on Oct. 13, KISR scientists noted that Kuwait 
uses nearly 15% of its oil and gas production for local 
consumption.  KISR projects that consumption will increase by 
around 6-7% per year.  According to KISR's estimates, 
electricity and water generation requirements for MEW take up 
about 55% of the domestic primary energy use; transport 
another 19%; and petrochemical and other industries use a 
further 25%.  Sixty percent of electricity generated is used 
by the residential sector, while 20% is dedicated to the 
industrial sector and 14% by the commercial sector.  By 
contrast, the government uses about 5% of electricity 
generated. These consumption statistics are the driving force 
behind KISR's energy efficiency and conservation initiatives. 
 KISR is reviving the GoK's interest in harvesting solar and 
wind energy technologies, primarily to enhance efficiency in 
air-conditioned buildings.  However, a perceived bottleneck 
is the lack of government implementation of KISR 
recommendations. 
 
¶6. (SBU) KISR recommended holding a GCC workshop by April 
2010, administered by the USG and hosted by the GoK/KISR, to 
establish a uniform GCC energy agenda and a committee 
dedicated to deploying energy efficiency technologies in the 
desert region, as part of the MEREE Initiative.  DOE agreed 
to send a letter of invitation to KISR for inclusion in the 
MEREE Initiative. 
 
THE WAY FORWARD: KISR, DOE AND STATE PARTNERING 
 
¶7. (SBU) Additionally, KISR requested more interaction with 
U.S. laboratories to gain technical support and human 
capacity building opportunities.  KISR officials reiterated 
their commitment to establish a window laboratory to support 
a National Fenestration Rating Council (NFRC)-like rating 
program.  KISR agreed to review the opportunity to 
participate in the International Green Construction Code 
(IGCC), by following up with DOE and its consultants. 
Finally, KISR agreed to explore comparative analysis for the 
current Kuwait Energy Efficiency Code and the International 
Energy Conservation Code. 
 
BACKGROUND 
 
¶8. (SBU) KISR and MEW's first energy conservation program was 
implemented in 1983.  Program revisions began in 1995 and are 
still under consideration with MEW.  KISR's suggested 
revisions include practice changes, energy audits, 
optimization of water consumption in cooling towers and the 
evaluation of district cooling viability in Kuwait.  MEW 
enforces the current code by controlling the maximum power 
connection for the A/C system and lighting.  According to 
KISR, energy conservation code revisions have saved the GoK 
over KD 3 billion (USD 10.4 billion).  KISR is currently 
working to reduce peak power demand in government buildings. 
KISR noted that extensive pre-closing treatment (turning down 
the A/C an hour before the building closes and relying on 
existing coolant) and time of day controls (turning off the 
A/C during low traffic hours) in government buildings were 
very successful in reducing peak power demand, with limited 
expenditure.  Between 2004-2007, the Kuwaitis reduced peak 
power demand by over 30% in 10 major buildings.  KISR 
estimates a nationwide reduction initiative would reduce 
national peak power demand by 154 megawatts, with a capital 
savings of KD 62 million (USD 215.7 million dollars).  The 
approach of peak power demand reduction received the 
Association of Energy Engineers "International AEE Award" for 
2008 and the "Emirates Energy Award" for the same year. 
 
¶9. (SBU) COMMENT: GoK officials' commitment to looking for 
both energy conservation and alternative supplies are 
welcome.  However, absent a rational pricing mechanism, 
conservation is a hard sell- the incentive for Kuwaitis to 
change their attitudes toward energy consumption is not 
automatic.  While an awareness campaign may produce temporary 
results, the default behavior is likely to be to continue to 
over consume energy.  END COMMENT. 
 
********************************************* ********* 
For more reporting from Embassy Kuwait, visit: 
visit Kuwait's Classified Website at: 
 
http://www.intelink.sgov.gov/wiki/Portal:Kuwa it 
********************************************* ********* 
JONES